Ladies and gentlemen, thank you for standing by. I am Emma, your Chorus Call operator. Welcome and thank you for joining the Deutsche Post DHL Group Conference Call. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be followed by a question and answer session.
I would now like to turn the conference over to Maarten Ziekenberg, Head of IR. Please go ahead.
Thank you, and a warm welcome to everyone out there to the Production of our sustainability roadmap. It's only 2 weeks after we talked about the full year reporting. So I'm glad to see many of you joining in on this important announcement. And as you've seen from the invite, we've got with us 3 colleagues. It's Frank Appel, the Group CEO Melanie Christ, the Group CFO and Thomas Ogilvie, Board Member in charge Of HR, we're going to take you through the presentation that you have in front of you.
And as always, there will be time for Q and A After that and with that right on to you Frank. Yes.
Thank you, Martin. Good morning as well from my side. So let's just Straight away to Page 2. There you can see on the right our new framework, how we want to now communicate going forward our efforts under ESG. We want to create really clean operations for climate protection.
We want to be a great company to work for all And we want to be a highly trusted company supported by our Go programs to really create lasting impact for the community. To achieve that, You can see on the left side that we want to intensify a couple of things and maybe highlighting here our carbon reduction targets, Which we will bring into alignment to the Paris agreement, so they've been science based targets and we want to really reduce our Carbon footprint in absolute terms until 2,030. We will invest a €7,000,000,000 Of course, for this year and up to 23, it's embedded already in our guidance. But Of course, in due course, it will increase over time. I'll explain later on more.
Important to know is well that our short term variable income It will be related to the ESG goals as well if the AGM will decide accordingly to We'll then go to Page 3. It just summarizes why we think ESG is of course important for us. You know that we have a significant footprint in carbon where we are 0.4% of the total industry emission and the Transportation sector contributes 16% to the total global footprint. We are also a large Employer with 5 70,000 people that's the reason why we of course have to do something under the social aspect. And governance is for us A given because we are acting in every part of the world in compliance and supplier code of conduct and these kind of things Fundamentally important to do good business for us.
We have on Page 4 a long tradition already talking about these things. I think we bring it now to a new level. We started already in 2,003 with our Go Help and we didn't call them by then. We started to call them accordingly in 2,009 when we launched our strategy 2025. We have over time introduced more elements Being alive with the sustainability goals of the UN or 0 emissions by 2,050, Go Trade we introduced last year and now we really Today, introduce our new sustainability commitments.
On Page 5, you see the full picture of The way we want to communicate that, of course, our purpose connecting people, improving lives, we have already since 2,009. In the center, you see the 3 dimensions we will lead you through in detail and on the bottom, our supporting So that brings me to the first element, Clean Operations for Climate Protection on Page 7, just where we start from today on is that we have 27,000,000 tons, metric tons Of Scope 1, 23, we will now adapt to the science based market That will lead to a significant increase in our footprint because we will go away from tank to wheel to well to wheel And then it will increase our carbon footprint by about 3,000,000. You can On the right, in the last 2 years, we were pretty good actually reducing our carbon footprint. It will now go up. And of course, Due to the growth, we expect in the next years our footprint will increase.
On the bottom right, you see that 2 thirds of our footprint are coming from the air transportation of On Page 8, the commitment, it's based on the science based targets and alignment with the Paris Agreement. We assume that we will grow our carbon emission well to real to 46,000,000 tons if we wouldn't do anything. So that's a quite sizable reduction need with €17,000,000 to get to €29,000,000 And that's the reason why we want to invest €7,000,000,000 in OpEx and CapEx until 2,030. On Page 9, you see some of the Targets we have defined, we want to have by 2030%, 30% of the fuel is certainly sustainable, 60% of the fleet should be electrified. Our new building should be all carbon neutral.
And of course, we will offer along our different products Carbon free and sustainable products as well. On Page 10, more detail on the aviation front. Of Sustainable aviation fuel will play an important role. Also the re fleeting of the fuel optimization through artificial intelligence And data analytics should drive that. Yes, so there are different elements we want to do on the sustainable aviation front.
On Page 11, you see a similar page for the line haul and the last mile delivery. So we said 60% should be electrified. We will use either sustainable biofuel or fuel on the long haul and we will do many other things to really optimize Our fuel consumption, so that we really become also much greener on the ground. 3rd dimension is warehouses and buildings. We have already a lot of renewable power, I think we can do faster better and faster here as well.
With the building design, we have the automation and Visibility about the energy consumptions, there are plenty of opportunities how we can make our facilities greener. Finally, on Page 13, The progress we have made since we started our journey in 2008 where we said we want to be 30% more carbon efficient, we achieved that Golarity in 2016, now we are at 2,037, 2 percentage points better than last year. We had the old goal was 50% efficiency by 2025. Of course, we will now drop that and we'll replace it With our science based target, the carbon efficiency index of course is not science based. We think it's more appropriate to move forward.
The long term goal to be carbon free by 2015 will continue from here. And with that, I hand over to Thomas, who will Lain now what we want to do under a great company to work for all.
Yes. Thank you, Frank. Good afternoon, everybody. So being a great Apply for a job every year within our company, but it's also a matter of competitive advantage and strategic priority As engaged and motivated employees are the prerequisite for great service quality and our profitable network, but also more and more when it comes to applying And adhering to high social standards, a matter of selection from our customers on what we see more and more in their RFQ processes. On Page 15, you see the areas we are looking at.
And all of the KPIs that you see there, They are steering relevant for us as a company and by that also part of our integrated reporting. We look as well at the aspect of attracting, retaining best talent, strong focus on OHS, operational health and safety standards and our lost term injury frequency, gender diversity as a And last but not the aspect of how to systematically measure, promote and prioritize Application of High Social Standards and Human Rights. On Page 16, you see in detail what's our aspiration in relation To employee engagement, in our annual global employee opinion survey, we measure employee engagement and have The aspiration to be consistently well above 80% of acceptance. Last year, we are achieved this already with a score of 82. And for the upcoming years with a growing employee base, we want to keep this level At this level at least.
On Page 17, because we have also a significant appreciation from external rating agencies like A great place to work, our top employers. Where we have and you can see it on the global map, more than 100 countries where we are Certified by external rating agencies as either a top employer or great place to work, which shows also our Global aspiration and global execution capability on Page 18, going to health and safety, We see already a positive trend in the reduction of our LTIFR rates. That's something where we want to continue this trend and accelerated to be well below 3.1 percent LTIFR by 2025. On Page 19, covering now the aspect of gender diversity and inclusion, we have not A single course model, I'm just focusing on one indicator, like gender, but truly Inclusive approach, so that we are an equal opportunity employer that irrespective of gender, social or Cultural background, sexual preference or religious beliefs, everybody in our company should perform up to his or her And that's what we want to foster. As one dimension, we picked our target of having at least 30% female representation in our management until 2025, which is compared to our current 23% Step up of 7 percentage points until 2025.
On Page 20, you see this once again in detail what I Blaine before, but what I want to highlight here is that from now on, we also incorporate our commitment and endorsement of the sustainable development from the United Nations 5 of Gender Equality as part of our sustainability roadmap. Page 21, Briefly, we issued and published last year a comprehensive human rights policy statement, Bringing together all aspects of proper business conduct when it comes to human rights related behavior, That's something where we have now also implemented a holistic management system ranging from training and Training and Awareness Campaigns to Self Assessment, but and that's giving a piece to the whole. Page 22, because we not only want to be a great company to all when it comes to our employees, but also take As corporate citizen in the communities where we operate in that we have also a strong impact with our group wide programs such Our volunteering programs are also our support programs for employees in need. But and you are well familiar with our Go programs where we Partnered with renowned institutions like the United Nations or SOS Children, Religious, Teach For All To actually make a contribution beyond our own footprint of protecting the environment in the area of GoHealth for disaster management With GoTeach for providing education to underprivileged communities.
And last but not least, with Go Trade to facilitate trade globally, so that people can participate in our global trade footprint. And this altogether, what you can see on Page 23 goes into 1% pledge That we also decided to issue as part of our sustainability strategy that we want to spend 1% of our net profit each year To create lasting impact on over or why are these programs that we have established since a while To also show that we are caretaking and responsible for the communities where we operate in. And with that, I would hand over to Melanie To tackle the G for governance.
Yes. Thank you very much, Thomas, and hello, everybody. We actually chose highly trusted company as our aspiration. So we want to have the trust Of our people, of our customers, of our suppliers, our business partners, the communities we work in and the wider public. And of course, trust It's nothing you just get overnight.
It is something which you earn over time by doing the right thing in the right way Consistently every day everywhere and that's our aspiration. And how do we want to do that? When we turn To Page 25, if you want to be a highly trusted company, it takes good governance. It It takes clear priorities and processes and measures to ensure trusted, Transparent and compliant business practices in all 220 countries and territories where we operate. And you can see in the circle on the right on Page 25 a couple of Measures we are focusing on.
I'll go into a bit more detail on the next pages, but just high level. It is a cultural thing. It is about making sure that all our people in the relevant positions, in all managerial positions Know what we understand under compliance and compliance behavior. It is linked to data protection As a core ingredient of our training curriculum, of course, in today's world, it's also about information security. It goes beyond us as a company.
It involves our Suppliers with our supplier code of conduct and of course we also have to measure it. So if you go to Page 26, Just a couple of additional points. In terms of making sure that everybody understands what we mean with right Behavior. We have a core compliance curriculum, which is a mandatory training course for all our managers and Also in certain areas beyond the managerial population and that also includes a clear understanding What data protection is about? And obviously, in today's world, one of the key questions around trust It's linked to information security, where we have the aspiration to be positioned in the top of our industry.
As we all know, that's a clear area where if things don't go according to plan, you quickly lose trust. So that's a very important element for us in the GPLAS. Yes. Turning to Page 27, we acknowledge that obviously we are working with Partners, our supplier base is a very important network for us. We have had our supplier code of Ever since 2008, we have refreshed it.
We have updated it. And of course, now putting even more emphasis on Also getting the right type of behavior from our suppliers and subcontractors, geared on our environmental aspirations, but of course also with regard For example, we do a systematic data driven risk assessment to identify what are the high risk Categories where we have a significant spend, what are the high risk suppliers. And of course, our situation To reduce the exposure of our company and to make also sure that in those areas as well we work with the right type of partners. And of course, that also includes due diligence and ensuring to ensure that That is not written paper that is also actually happening in reality. So Making sure that things really happen takes me to Page 28.
It's probably not so surprising to hear from the CFO. If you want to make progress On the key KPIs, we obviously have to measure them. We need targets. We need controlling. And one thing which is very important for us is and we have worked on that for quite a while is we don't want to have a parallel reporting.
We With that all relevant ESG KPIs, particularly those KPIs which we define as steering relevance Reported ultimately through our core financial systems, so that we really have a single source of truth. One nice example is our CO2 footprint, our CO2 efficiency, which we have reported through our core financial system for over a decade now. But of course, that is also something which is evolving over time. When you look at the list of our ESG KPIs, we have different levels of quality. So That will now take some time to get better here and broaden the portfolio of ESG KPIs.
The second element on Page 28 is the inclusion of ESG in risk reporting and Best investment evaluations. So obviously, ESG risks and opportunities are becoming more and more important, Which also means that we have to include them even more systematically in our internal risk reporting. And not surprisingly, we also have to take ESG Criteria into consideration, particularly when taking our investment decisions in the business case evaluation. And That doesn't have to live somewhere in the finance systems. It really has to be filled with life, which means that When we do business reviews, be it on corporate, be it on divisional, be it on local level, in the same way in which we discuss financial information, we have to talk More about non financial KPIs, so clearly, the discussion of the relevant ESG KPIs is going to be integrated even more closely into all our business review activities and of course also into the activities of internal audit To make sure that the controls we define for the ESG KPIs are lift with the same quality like we know it from our financial KPIs.
That takes me to Page 29, something which I guess many of you will have Already that, yes, we have also taken the decision to integrate non financial and financial AVI is more closely in our annual report, where we have instead of having an annual report and a separate CSR We have merged the 2 for all steering relevant KPIs and we also provide increased transparency in What I hope is easy to read format for you in the form of ESG presentation and ESG stat book. We've had an IR That book for the financials for many, many years now. And we hope that you will find the ESG stat book With all relevant ESG KPIs as useful as the stat book for the regular financials. Of course, that is a moving target because as you all know, there's not the one ESG reporting standard. I So hope that one day we may get there.
For the time being, we try to give information in different formats And we will, of course, enhance our ESD disclosure going forward also to implement new regulations Like the taxonomy, which takes me to Page 30. That is a decision which will be proposed to the AGM on 6th May, if we are serious about our ESG agenda and we obviously are, I think it only makes sense to also link a part of the corporate board incentivization to ESG. The proposal to the AGM Is that the annual variable pay, which is paid out partially in the following year, partially with a 2 year delay, That 30% of this annual variable pay for the corporate board will be linked to ESG targets, 10% for E, 10% for S And 10% for gs. I think that we are really very cautious as a corporate board to making Our sustainability aspiration come true over the next years. So much for the G pillar.
Before I hand back to Frank, Make a quick CFO comment on the SEK 7,000,000,000 which Frank already talked about. On Page 31, You can see a rough indication of the phasing of those €7,000,000,000 over time. I mean, it's €7,000,000,000 over a decade. We all know that there is a natural element of forward looking uncertainty. Of course, we have used many assumptions to calculate the €7,000,000,000 but there is some solid modeling behind it.
And you can see that it is a bit back end loaded and that over time the gray bars get larger than the yellow bars. The gray bars are aviation and that is sustainable aviation fuel. There at the moment, there is a very limited supply. Our assumption is that over Time, the supply side will go up and that by 2,030, we will be able, as Frank already said, to have a 30% luff plant. And that also explains why in year 10, in 2030, we have the highest grade bar.
In the Earlier years, particularly now in our current guidance time horizon 2021 to 2023, It is predominantly on the fleet side and on the building side. And So we will continue this decarbonizing our last mile. We will work on the buildings where technology and It's available today and that is, of course, included in our guidance for the year 2021 to 2023. And with that, I hand back to Frank for the wrap up.
Yes. Thank you, Melanie and Thomas. So may I go straight away to Page 33. Here you see the whole picture again of the purpose we have, which will be supported by the 3 pillars as we just explained A summary of all the targets starting with the SPTI target for carbon reduction. Of course, the usage of sustainable fuel, our single mission 2,050 in place, we have pretty clear Goals as well with regard to employee engagement, health and safety and women in leadership positions.
The ESG is not only that we will consistently report about that, but also we will link it of course to the standard even if Melanie was right saying there is still work to be done for everybody to get to a common Standard somewhere in the next years, but for the time being we will link it of course to the main well known ones. The ESG targets will be a part of our remuneration, so that is also here clearly visible And all of that should be supported by our 1% of net profit investment into our carbon programs. So then final page, it only shows that our new circle is well linked to our overall strategy. It's a great reflection of what we intend to do anyway in the strategy and that makes us confident that we also can execute this swiftly because Our colleagues inside of the organization will very much understand easily what kind of priorities we have, how they are linked Our overall strategy and we have learned that now in the last three strategy circles that You have to bring it in something which is understandable also for the A side because then you get really traction.
And with that, thank you very much for listening and I hand over
Okay. Operator, if you then please start the Q and A round.
The first question comes from the line of Neil Glynn with Credit Suisse. Please go ahead.
Good morning, everybody. I hope all are well. If I could ask three questions, please. The first one is just with respect to how you steer the business over the course of the next, I guess 9 years to 2,030. On the subject of rising costs and whether that's sustainable aviation fuel or others, Just interested in your take.
Does this put more pressure or provide more opportunities to take the next steps to digitize The cost base and achieve more labor efficiency gains in that period? A second question on procurement by DGF. Obviously, you're in control to whatever extent with the assets that you actually have responsibility for. But I'm interested in terms of how you will actually govern and make decisions on 3rd party carriers That you will work with going forward. And over time, might that even suggest more concentration among the top carriers on the air on the ocean side for DGF?
And then the third question on developing economies. How much visibility do you feel you have in emerging markets On things like infrastructure developments relative to Europe and how big an uncertainty and a risk factor is that as we progress through the decade?
Yes. May I take the first and the third and then Melanie answers the second. For us, it's important to get real traction that the organization understands that we are serious about that. So the signal of the €7,000,000,000 is not only to U. S.
Investors or the public, it's also internally we are serious about that. So that people are now really starting to Alternatives which we might find. And of course, also explain that then to customers what we are doing and how serious we are. And we have a lot of customers who have their own ambitious roadmap and together these things together, I think It will give us significantly more momentum. Of course, combining that with digitalization, it should give us more efficiencies.
And of course, we should have a better route planning. We should have a better usage of fuel on the airplanes. So these things are coming together. The lessons learned I have From the digitalization agenda is that we really got tremendous momentum after we said it's not You have to do that, but there's no money left. In digitalization, we see already that people are now spending their money and we also see that the benefits are increasing over So yes, it will it will be an issue of digitalization give us another boost into become more effective, more efficient, Have better offers to our customers.
On the other one, of course, that is maximum complexity. The good news is The majority of our carbon footprint, of course, is linked to the major markets U. S, Europe and China. All three parts have a clear carbon reduction target. If we miss the goal in 1 or the other country because They just have not the infrastructure, so be it, but the majority of our carbon footprint is by connecting these parts of the world, Which have very clear agendas to become more carbon neutral.
Yes.
Hi, Neil. So on your second question, I mean, Of course, the big topic, I mean, when you look at our CO2 footprint in 2020, 2 thirds is aviation And another way to slice it, 75% is Scope 3. So the biggest footprint is from the flying in Express and in forward looking. And it's very clear that we won't be able to solve the problem and get to our new targets on our own. We will have to work with carriers.
We have to work much more in alliances going forward. But I think the good thing is given our size, given also the Close collaboration between Express and Global Forwarding, we are, I think, in a good position here. And not Needs to be done still also on the basics. So for example, things like the book and claim concept, yes, if we say we buy sustainable aviation Fuel and it is kind of like fit into the broader tanks and then ends up in one of our partner flights. We have to be able to book those CO2 credits.
I think that's common logic, but it's not fully accepted yet on the accounting side. And so one of our Key priorities now will be to work with carriers, with partners on establishing those principles so that we can then jointly for the Aviation industry make progress.
Yes. And it will remain, of course, that will change over time. Certain things, of course, are really We reduced that and of course it's easier in scope 1 and 2. In scope 3, of course there will be a continuation of offsetting, but increasing the amount of insetting as well. So this is not one step, it's a journey.
And of course, it becomes better and better over time and the more sophisticated our suppliers We're under equally pressure as any company. Fortunately, the more it will become better because then we don't have to source for them and they will start sourcing And then we can offer alternatives to our customers knowing that certain airlines are using more sustainable fuel.
Great. Thanks for such detail.
You're welcome.
The next question Alexia Dogani with Barclays.
I just had two questions, please. Just Firstly, on your targets for the level of electrification for the last mile delivery, can you just Discuss how kind of street scooter falls in this or not and what your plans are with regards to that? And then just secondly, in terms of sort of overall sustainable logistics, I mean, have you seen that your Customers are willing to pay more for sustainable solutions and kind of how can you enable them to reach their own kind of decarbonization targets.
Thank you.
Yes, Alexia, so maybe I take the second and Melanie the first. So this is of course here in our assessment it's assumed that customers will not pay. And I think we should have to think about that in the following way. My hope is after we made a bold statement today that others in our industry will follow. We can't solve that problem.
We are 0.4% of total carbon footprint, so we need to meet more people who are adaptive to that. If that happens, then we all face significantly higher costs, Which of course if everybody does the same will lead to higher pricing in the market and then customers have to pay for that service. On the other side, They want to be carbon free as well. If it doesn't happen, which is also a scenario I will say, okay, I don't mind, let's see, We will have a competitive advantage. So in the case that we have to buy the bullet for €7,000,000,000 we will gain market share because there are building So, we might not be willing to pay, but they can't find an alternatives to us.
Scenarios A is the whole industry following our Leading example is going on that. Then I will see when we will definitely see price increases because the customers have to pay for it. But if you think about what it means for lending costs, the carbon footprint of our industry will only increase low single digit the cost Of the landed costs. So if others are saying I want to have carbon free product then they have to pay for it and it will not inflate their costs either. If that doesn't happen, then the second is we probably can't push it through because our prices would be not competitive.
But then we at least would get more market share because Our customers will benefit from our carbon reduction. So one or the other will happen. And in both cases, I think as a leader, you are That position my expectation is that we will see a shortage on sustainable fuel and the companies who will commit first We probably have long term competitive advantage to the competitors.
Yes. And then on On the street scooter question, so we started building street scooters ourselves many years ago because we saw the need for an electric Last mile delivery vehicle. The fundamental need is obviously still there and even more so today than a couple of years ago. What has changed is that we obviously don't have to build the street scooters ourselves. So I think it was clearly the right Ideal, but it's not the most economical way for us to do it with an in house production.
At the moment, we have 15,000 electric last mile delivery vehicles out there. We plan to ramp that up To 80,000 by the year 2030, we are now phasing out StreetScooter in a gradual way. We will still build several 1,000 Street Scooters, as long as there is a limited supply of commercially available alternatives, but over the next Yes, there will be actually available alternatives at a more attractive price point, And that is why we are switching from street scooter to more standard electric last mile vehicle. Great. Thank you very much.
You're welcome.
The next question comes from the line of Adrian Piel with Commerzbank. Please go
ahead. Yes. Hi, everybody. Good morning. Two questions from my side.
A question asked on your suppliers actually brings me to the topic. Would you Rate your suppliers on ESG following the same framework that you have just presented to us? Or would you Continue to rely on whatever external rating they claim to have. And the second question is, Since your strategy is to a large degree depending on aircraft fuel and fuel tow, Lower fuel might not be available at any quantity in the future. So is there a plan B that you have?
Would you do more On CO2 efficiency in other areas or how should we think of that? Thank you.
Yes. So We have not taken the final decision how we will rate the suppliers. Of course, we will look into these things. And as Melanie said, there are so many standards and we probably will follow first more the external standards if they are qualified for that as well. But It is a journey and we will see so many changes there, so many activity going on and that's great to see.
So Let's see what the future will bring. Of course, we will ask our suppliers as well about how they measure that, what is their GRI or whatever, So that we get more consistency and maybe we end up as well to say, okay, we measure our supplies as well along our framework.
Yes. I mean just to add that, so I mean like as I said, we have our supplier code of conduct and we expect our suppliers to sign the supplier code of conduct Accepting hence our standards, so that's kind of like the first thing. And as I mentioned, we are also doing our Internal analysis on what are high risk categories and what are high risk suppliers in those high risk categories. And that is something where we will probably not just rely on information being given to us, but we'll also do more audits ourselves going forward.
Yes. On the soft, at the moment, it's true we don't know yet if we get to that level and how we get To that level, but I think the commitment we are now giving will enable others to start building facilities. And I believe we will see significant momentum gaining in the next 5 years. Of course, the next 5 years will be a challenge and it will be Mainly sustainable biofuel, but the technology is now imminent. And if you talk and we talk to the energy companies For quite some time already, they all understand that they have to go along this way and they have enough capacity to invest as well for longer.
Of course, we have to join them somehow. But I believe we will see significant progress in the course of a decade. If that doesn't happen, which I doubt if it doesn't happen, then we of course have to accelerate other stuff and look into all other Alternatives, the problem is our carbon footprint is 2 thirds related to the flying. So we can't overcome. The EMEA would be 0 carbon emission on the rest.
We would not probably reach our goal with 29,000,000 tons. So even if everything else would be carbon neutral because The carbon footprint of the air is quite sizable in our case.
And just to add on that, so as Frank said, we obviously have tackle the aviation topic, I think the logistics industry overall has to tackle the aviation topic. And whilst there's work Ongoing on electric planes and so on, I think for the next decade, we need better solutions which are working with the existing Craft will fly for quite a long time and that is why we are pushing the whole ZAF element so strongly. And I think given that this is at an early stage, by having large players like us making such clear statements, I think that is then also going to help develop the market over time. And as I said before, I think this is really an area where we will have to work very strongly with Industrial alliances to get to the right level.
Right. And just very quickly following up, I guess you're probably not providing any new guidance On CapEx having just reported, but is the program that you've outlined for us today, rather, let's say, Pushing CapEx for the 3 year time period you have just provided a bit up? Or is that Perfectly baked into what you have been saying so far.
Yes. So thank you for the question, Adrian. So just to be totally clear, this is, of course, Included in our guidance for the year 2021 and also in our medium term guidance for 2023. So when we came up with the guidance just 2 weeks ago, We already have our sustainability calculations lying next to us in parallel to make sure that we don't have to change our guidance after Just 2 weeks. As I tried to show on the one slide with the gray and yellow bars, a big chunk is of the last mile, which we have been working on for quite some time.
See the StreetScooter question from Alexia earlier. So there's nothing totally surprising or shocking in the current guidance.
Hi.
Yes. And on the SAF, it's currently, it's assumed that we pay a certain money for We have to work out in due course and of course not in the next 2 years because that will not happen if it would be smarter To join a consortia, we're building a fuel farm for instance and that is more CapEx than operation cost. That's a decision we have to take later somehow what is smarter and what's a better way to get to sustainable fuel because if you invest CapEx of course then The price you pay for the fuel is lower. If you don't go into the risk of the CapEx, then of course the fuel price would be higher. So and that needs to be worked out with Partners we might find.
Right. Okay. Just very last question from my side. Would you I mean, it's probably very Much out in the future, but on the other hand, given that you're obviously currently generating excess free cash flow, partially you're giving back to Investors in the form of share buybacks and dividends. Would you at some point in time also considering to make ESG is some sort of, let's say, remuneration in the sense of giving back something to the society and not paying our dividends, but Do more on the ESG targets in the future.
Would that be an option or not? Thank you.
Yes. So this is actually at End of the day as well, how the market will rate that. So at the moment, we have not such a plans. I believe we can bring the 3Dimensions employer customers and shareholders together as we have done in the last decade. So we don't have to penalize one for the other.
But of course, if we could accelerate our journey through what more investment it would be appreciated By the investor base by saying we are happy that you are doing that then of course you might take a different decision. So Dana, I think we have to it's a starting point some of What communication we give today and of course we will learn on the next years what also investors if I look into the index Development of the development of index funds for sustainability is quite impressive. So there's a lot of money. If we get rewards For our story higher and we see an appreciation of the share price because we are valued more because and the higher multiplier Our company is more sustainable. Then we might take a different decision when we don't see that.
And that is a decision we don't have in our hands. At the moment, I don't see we are not assuming a fundamental change. But if that happens and the companies which are greener get a higher multiplier, And of course, we might consider to accelerate certain journeys.
Perfect. Thank you.
You're welcome.
The next question comes from the line of Sumit Mehrotra with Societe Generale. Please go ahead.
Okay. So again, I'm just picking up on the $7,000,000,000 investments and mainly coming from SAF here. So I'm just trying to find a little bit more about what are you actually hinting at in terms Infrastructure that you're targeting for SAF here, I mean is this, as Frank just mentioned, Fuel farms investments or production infrastructure, transport infrastructure that we have in mind? And also are you Basically hinting at that you're going to procure as a sustainable fuel on your own and then you're going to provide it for Airlines offer your own fleet. So how is this plan going to work out?
Secondly, if you could highlight some specific metrics that would feed into your S and G buckets For management remuneration, you highlight a 10% split each across 3 metrics. So that would be great Thank you.
Maybe moving on organizational approach and then Melanie can share a little bit more to you. So we will have now a dedicated Team which will look into all these alternatives. We don't know the answer yet. In the numbers, It's more assumed that we pay a higher price for sustainable fuel than becoming an energy company ourselves. But if the only way is To get to sustainable fuel by committing also CapEx into fuel farms, then we might go there.
And that is a job we need to be done probably in the next 24 months To get a better understanding, how the industry, our suppliers, if you talk to the energy companies, they all are very active in that field and understand That they have to create alternatives to fossil fuel. You can talk to anybody around the world and they are all understanding fully that there is a new way How you generate and they see that as a business opportunity, which is good news. So in principle, I don't want to run fuel farms myself, Because we are not an energy company, we are consuming that. But if that's necessary and we figure out otherwise we don't make any progress, we might consider Somehow. And we have set up a team which is only fully dedicated.
So not the divisions in our company will independently look we will centrally Coordinate that so that we have a consistent approach how we secure fuel for internal purposes and also to external to the partners. But with that, I And over to Melanie for more detail on other aspects of that.
Yes. I think Frank already mentioned the important point. So what we have Assumed for making our calculation of the SEK 7,000,000,000 is we looked at how much SaaS Need, will we have over time getting to the 30% blend rate in 2,030 to achieve our science based targets? What are the projections on availability of Luvs over the time and what's the assumed price delta between sustainable aviation And the basic assumption here was that we would be buying and that we would not I'll start producing Zafda ourselves. I think that is still the fundamental hypothesis.
We have done first pilots At the airport in Amsterdam, at the airport in San Francisco. But as Frank said, it is something where everybody is still learning And we may come to a point where we have to make a longer term commitment to really get the wider scale production Going, I think that is a little bit learning by doing. With regard to the S and The KPIs, so on the S pillar, we had the KPI employee engagement in our Annual employee opinion survey for many years now that is also audited by TPWC with reasonable assurance. Thomas mentioned LTI FR as a potential second important KPI here. On the GPLR, we have Ideas on a couple of KPIs, for example, around the core compliance training and so on.
What we will now The AGM is, 1st of all, changing the remuneration scheme for an ESNG component, and we will first implement that for the year 2020 And we will then also come up with the specific KPIs to be used for ESNG.
Yes. And maybe final thing on that, we have of course the team I just talked about, but also look into funding from governments. The EU Has earmarked a lot of money. The U. S.
Has earmarked a lot of money. China has committed to become carbon neutral in 2,060, Carbon free actually. So we have to look into that as well. And of course that is a significant lever as well. The government's understanding Automation of that scale is not an easy business case, but needs funding as well from the government, Not in a way for subsidies of certain products, but more for enabling companies to get a reasonable business case By subsidizing sustainable fuel for instance out of technology, then of course we have to look into that what is a better alternative.
So it's We will probably come back to you on an annual basis anyway to explain more what we are doing there because it's a complex So in a way and it's not easy to get from here where we want to be and that needs several iterations where I can't even tell you by heart now How much will be OpEx and how much will be CapEx?
Thank you very much for
your efforts. Thank you so much.
Welcome.
At this time, there are no further questions. So I hand back to Martin Ziegenbeis for closing comments.
Great. Thanks, Emma. And before handing over to Frank for his closing remark, I want to thank Melanie, Thomas and Frank for Taking the time to introduce you to our ESG roadmap, which I'm sure we will We continue to have a dialogue on with you over the next weeks months years as this is part of the whole Scope of themes, we are keen to discuss with our investors also going forward. So with Without further ado, Frank, for your closing remarks.
Yes. Thank you for joining us this morning. We actually, as a senior management team, are pretty excited What we have to put together, we believe that this will make a lot of sense to our customers, our people and hopefully to you as well. We have clear roadmaps defined along the ESG dimensions. And I have no doubt that we will get very good traction.
It's After we started the whole journey in 2,008, I think it's now the next s curve of performance and we want to be seen in our industry as leader in the industry and I believe that we will achieve that goal again. And I believe that we will achieve that goal again with that approach. And with that, thank you very much for listening us today. And hopefully, We can see each other sooner or later again in person in road shows or whatever. Thank you very much and bye for today.
Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.